XPEL, Inc. has recently released its 10-K report, providing a comprehensive overview of its financial performance and operations. XPEL is a leading provider of protective films and coatings, including automotive paint protection film, surface protection film, automotive and commercial/residential window films, and ceramic coatings with a global footprint, a network of trained installers, and proprietary DAP software. The company is dedicated to exceeding customer expectations by providing high-quality products, leading customer service, expert technical support, and world-class training.
In the year ended December 31, 2023, XPEL reported total revenue of $396.3 million, representing a 22.3% increase from the previous year. The company's gross margin increased by 27.4% to $162.4 million, with a 41.0% margin of total revenue. Moreover, XPEL's net income saw a significant increase of 27.6% to $52.8 million in 2023. The company's primary measure of financial performance, EBITDA, also increased by 25.7% to $76.9 million, representing 19.4% of total revenue.
Geographically, XPEL experienced growth in many regions, with the United States being the most mature market. The U.S. market saw a revenue increase of 18.4%, accounting for 56.7% of total revenue. Canada, China, Continental Europe, the Middle East/Africa, the United Kingdom, Asia Pacific, and Latin America also contributed to the company's revenue growth.
Product revenue, which includes paint protection film, window film, and other products, increased by 20.6% in 2023 and represented 78.6% of XPEL's consolidated revenue. Revenue from the paint protection film product line grew by 19.5%, representing 58.0% of total consolidated revenue. Additionally, service revenue, consisting of fees for DAP software access, cutbank credit revenue, installation labor, and training services, grew by 29.0% in 2023.
XPEL's cost of sales, including product costs and service costs, increased in line with the growth in revenue. Product gross margin increased by 28.5%, while service gross margin increased by 24.9%. The company also reported increases in sales and marketing expenses, general and administrative expenses, and income tax expenses due to its ongoing growth.
In terms of liquidity and capital resources, XPEL reported cash and cash equivalents of $11.6 million as of December 31, 2023, with cash flows provided by operations totaling approximately $37.4 million for the year. The company also had approximately $109.4 million in funds available under its credit facilities, providing sufficient liquidity to support working capital needs, capital expenditures, and debt servicing.
Following these announcements, the company's shares moved -1.0%, and are now trading at a price of $52.26. For the full picture, make sure to review XPEL's 10-K report.
